European shares close down as US confirms EU steel tariffs

Ilona-Billington
May 31, 2018 2 min read

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European shares closed in negative territory Thursday after the US confirmed it would impose steel and aluminium tariffs on the EU. The EU, Canada and Mexico had initially been made exempt from the incoming tariffs amid talks.

However, those talks are considered to have failed and so, the tariffs will now stand. The EU has already stated it is planning counter measures.

Investors sentiment also suffered amid renewed fears over US President Trump’s plans for luxury German car imports.

The EUROSTOXX 600 closed 0.63% lower while the EUROSOTXX 50 ended 0.75% in the red. The regional bourses were a red. The German DAX lost 1.40%, the French CAC slipped 0.53% and the Spanish IBEX ended down 1.05%.

German car stocks

Following on from news last week that the US has begun investigating the impact of European car imports on its own car industry, news has emerged suggesting US President Trump could move to block German luxury carmakers from exporting to the US.

German Magazine, Wirtschaftswoche, reported earlier Thursday that Trump told French President Emmanuel Macron last month, of his intentions to prevent Mercedez Benz cars from driving down Fifth Avenue.

German carmaker stocks are in the red in the wake of the report:

Daimler shares slipped 1.89% to €61.68.

Volkswagen shares slipped 1.91% to €159.10.

BMW shares edged 0.95% lower to trade at €85.38.

Bank stocks also lose out

While investors were reeling from news that US 25% steel and 10% aluminium US import tariffs would become a reality for the EU, other stocks were also in the red.

Deutsche Bank shares slumped 7.15% to €9.16 after a WSJ report stated the US Federal Reserve considered the US portion of the German banks business to be in “troubled condition.”

Elsewhere, Italian energy firm Enel shares slid 1.03% to €4.70. That fall came amid ongoing political uncertainty and despite the news it had beaten competitor Iberdrola in the bidding war for Mexican utilities provider, Eletropaulo.

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